Federal government accuses pharmacy benefit company of fraud

Tuesday, September 30th 2003, 12:00 am

By: News On 6

PHILADELPHIA (AP) _ The nation's largest pharmacy benefit-management company received kickbacks from drug manufacturers for persuading doctors to switch patients to medications produced by the firms, prosecutors said.

In a federal lawsuit filed Monday, the government also accused Medco Health Solutions of ignoring safety rules at its mail-order drug centers, altering its records to avoid paying penalties and failing to follow state laws requiring pharmacists to consult with doctors about certain prescriptions.

Medco called the charges either false or overstated.

``The full story will show that our people are highly skilled, our policies are rigorously enforced and our pharmacy practices, which are regularly inspected by state boards of pharmacy, lead our industry in lowering the cost of providing high-quality health care for millions of Americans,'' David Snow, the company's top executive, said in a statement.

Prosecutors said the kickbacks Medco received from the drug manufacturers _ most notably from its former owner, Merck & Co. _ corrupted a legitimate program that aims to get doctors to switch their patients to less costly but equivalent medications. In 2001, the lawsuit said, Medco received $430 million in kickbacks from Merck & Co.

Medco said the payments are simply rebates and any savings are passed along to customers. The company denied that the program ever compromised patient safety.

Medco, based in Franklin Lakes, N.J., acknowledged that some violations cited in the complaint occurred, but said they were isolated incidents that happened years ago and have since been corrected.

The violations at Medco's mail-order pharmacies occurred as a result of the company's failure to meet productivity deadlines, the government said. The lawsuit claims Medco required employees at mail-order centers in Florida, Texas, Nevada and Massachusetts to alter computer records to make older prescriptions appear as if they had just been received. Altering the records, the lawsuit said, allowed the company to avoid paying late penalties to its clients, which are large employee health plans.

Medco said the deletions happened without company approval and the employees who did it were caught and fired.

Prosecutors said Medco also assigned poorly trained assistants to a range of duties normally performed by pharmacists, including calling doctors to confirm prescriptions.

Those assistants were expected to speak with 20 to 25 physicians each hour _ a quota the government said was too difficult to meet. As a result, the lawsuit claimed, the assistants sometimes skipped the call and then fabricated records to make it appear as if they had taken place.

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